New US tariffs of up to 100% on drones and selected drone components took effect on Thursday as Washington seeks to reduce the country’s dependence on Chinese suppliers in an industry dominated by China.

The duties were introduced under an order signed by US President Donald Trump in August. The White House said the measures were aimed at addressing “the national security threat posed by imports of drones and their components” while strengthening domestic supply chains.

Drones have become increasingly important for military operations, surveillance and critical infrastructure. Their widespread use during the war in Ukraine has highlighted their role in modern warfare and demonstrated how important access to reliable drone technology can be on the battlefield.

US officials have raised concerns about the country’s dependence on Chinese-made drones and components, particularly products manufactured by DJI, the world’s largest commercial drone maker. They argue that reliance on foreign technology could create risks involving disruption, espionage and access to equipment during a conflict.

Under the new tariff structure, drones with a takeoff weight of more than 25 kilograms will face a 100% duty. The same rate applies to drones equipped with thermal imaging capabilities and certain docking stations.

Smaller drones will face a 25% tariff.

Some drone components classified as less sensitive will also be subject to additional duties, although those measures will not take effect until February 9 next year.

The new tariffs are part of a broader effort by the Trump administration to encourage domestic production and reduce exposure to overseas supply chains in sectors considered strategically important.

China has strongly opposed the measures. Beijing called on Washington to withdraw the tariffs shortly after they were announced.

A Chinese commerce ministry spokesman said the duties would “disrupt the global drone supply chain and further undermine a fair and competitive market environment.” He said China firmly opposed the move.

DJI has a particularly strong position in the global drone industry. The company, which was founded in 2006, has accounted for more than two-thirds of the worldwide drone market in recent years, according to several industry studies.

The company has also faced increasing scrutiny from US authorities. Since 2022, DJI has been included on a US government list of Chinese companies considered linked to China’s military, restricting its access to certain US technologies.

DJI has challenged its inclusion on the list and has rejected the allegations surrounding its classification.

The new tariffs could increase costs for US consumers, businesses and organisations that rely on imported drone equipment. At the same time, Washington hopes the measures will encourage manufacturers to establish or expand production inside the United States.

The policy marks another step in the growing technology and trade tensions between Washington and Beijing, with drones emerging as a strategically important industry because of their expanding role in defence, security and commercial operations.

Shein shares fell sharply on their Hong Kong trading debut on Tuesday, dropping as much as 10% before recovering some of the losses, as the fast-fashion company faces rising tariffs and shipping costs that have put pressure on its profits.

The listing marks the end of a lengthy effort by Shein to enter public markets. The company had previously considered listings in New York and London but faced regulatory scrutiny over its Chinese supply chain and business practices. It eventually turned to Hong Kong for its initial public offering.

Shein priced its shares at HK$48.56 each and raised about $1.7 billion (€1.46 billion), making the offering one of Hong Kong’s largest share sales of the year. The company opened its IPO for investors on August 24 before setting the final share price on August 31. Trading began on Tuesday after the exchange completed its approval process.

Shares initially dropped below HK$44 before narrowing their losses.

“Shein’s Hong Kong listing marks a new starting point,” Chief Financial Officer Leigh Gui said during the company’s listing ceremony.

The company has built its global business around producing inexpensive clothing quickly and shipping orders from China to customers in Western markets. That model is now facing higher costs as the US and European Union reduce or end tariff exemptions for low-value parcels from China.

Shein’s profits have been hit by the changing trade environment. The company reported a $99 million (€85 million) loss in the first quarter of the year, compared with a profit of $395 million (€340 million) a year earlier.

Higher shipping expenses have added to the pressure, making it harder for the company to maintain its low-price strategy. Tariff costs have also forced Shein to increase prices, potentially weakening one of its biggest attractions to consumers.

Shein was founded in China in 2012 and later moved its corporate headquarters to Singapore in 2021. Despite that move, its manufacturing network remains closely connected to Guangdong province, where the company developed its small-batch production system.

Founder Sky Xu has described Guangdong as the company’s roots and the starting point of its growth.

The company has also faced regulatory challenges in Europe. In February, the EU opened an investigation into Shein over concerns involving allegedly illegal products, including accusations related to child sexual abuse material.

Shein’s Hong Kong debut values the company at roughly $27 billion (€23.2 billion), far below its peak private-market valuation.

The listing nevertheless gives Hong Kong’s stock market a major boost. The exchange has attracted more than $40 billion (€34.4 billion) through IPOs so far this year, as companies continue to seek access to international investors through the city’s financial markets.

Eurozone inflation rose sharply in August, reaching 3.3 percent as energy prices climbed at their fastest pace in months amid higher oil and gas costs and disruption to shipping through the Strait of Hormuz.

The annual inflation rate increased from 2.9 percent in July, according to a flash estimate from Eurostat, the European Union’s statistical office. The rise puts inflation well above the European Central Bank’s 2 percent target and could strengthen expectations of another interest rate increase.

Energy prices were the main driver behind the acceleration. They rose 14.3 percent in the year to August, up from an annual increase of 10.3 percent in July. On a monthly basis, energy prices increased 2.9 percent, contributing significantly to the overall rise in consumer prices.

Services inflation, which is closely monitored by the ECB because it tends to be more persistent, eased to 3 percent in August from 3.3 percent in July.

Core inflation also slowed slightly. The measure, which excludes energy, food, alcohol and tobacco, fell from 2.5 percent to 2.4 percent. Food, alcohol and tobacco prices increased 1.2 percent from a year earlier, unchanged from July.

The figures indicate that higher energy costs have not yet translated into a broad increase in underlying price pressures. However, economists expect elevated gas and food prices to continue affecting inflation in the months ahead.

Leo Barincou, senior economist at Oxford Economics, said the increase was driven by a rebound in fuel prices following the renewed closure of the Strait of Hormuz. He said underlying price pressures remained contained because services inflation had eased, but inflation was likely to stay above the ECB’s target into next year.

Inflation varied considerably across the eurozone. Lithuania recorded the highest rate among countries included in the flash estimate, at 5.8 percent, while Estonia had the lowest at 1.3 percent.

Among the bloc’s largest economies, inflation stood at 2.7 percent in France and 2.9 percent in Germany, both below the eurozone average. France nevertheless saw a notable increase from 2.4 percent in July. Spain recorded inflation of 4.5 percent, while Italy reached 3.2 percent.

Markets are expecting the ECB to raise interest rates by 0.25 percentage points at its September 10 meeting as policymakers respond to renewed price pressures.

Barincou said inflation was accelerating and the ECB was highly likely to raise rates next week, but warned against assuming that another increase would immediately follow, given that underlying inflation pressures remain relatively contained.

The latest figures leave policymakers facing a difficult balance between controlling inflation and avoiding excessive pressure on economic activity.